When producers maximize their profits from the production of a good or service, they are:
A. assuming that all other things are equal.
B. making a trade-off between economic efficiency and economic freedom.
C. exhibiting purposeful behavior.
D. testing a hypothesis.
Answer: C
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Refer to the above table. The marginal factor cost of labor is $200. To get the firm to hire 8 workers, the
A) firm must be able to reduce wages below the marginal factor cost. B) price of the good must be $8. C) eighth worker must be at least as productive as the seventh worker was. D) wage rate must be a fraction of the marginal factor cost of labor.
Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?
a. The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living. b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own. c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient. d. There will be no shortages under the first-come first-serve basis of allocation. e. A random process of allocation is fair in the sense that everyone gains and there are no losers.
During the 2000-2009 decade,
a. the economic freedom rating of the United States fell, but the growth rate of real GDP was more rapid than in recent decades. b. the economic freedom rating of the United States increased and the growth of real GDP was more rapid than that of recent decades. c. the economic freedom rating of the United States fell and the growth of real GDP was less rapid than that of recent decades. d. the economic freedom rating of the United States increased but the growth of real GDP was less rapid than that of recent decades.
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.